Technical Highlights

A broader market correction caused the stock to sharply trend downward after hitting its 52-week high. Subsequently, it continued to decline due to weak buying interest. Lately, the stock has been gaining momentum in trading, leading to an upward movement that broke through a crucial pennant pattern. After the breakout, the stock continued to rise. These multiple positive indicators signalled that the stock had shifted into a positive trend

Momentum indicators are also aligning well with the bullish movement in the stock. The RSI accelerates and is nearing the overbought zone, signalling the buying interest is accumulating. Meanwhile, both the upward-pointing MCD and the 20-day EMA line further confirm the bullishness of the stock going forward.

For an ideal entry point, investors can eye on the range between RM1.82 to RM1.88. The first resistance is set at RM1.92, and if the stock breaks this level, it could test RM2.11, the subsequent resistance point. A breakthrough beyond RM2.11 could push the stock toward its 52-week high if momentum continues. Conversely, if the stock drops below its recent low price of RM1.71, it would indicate the start of a consolidation phase.

Entry – RM1.82 – RM1.88

Stop Loss – RM1.61

Target Price – RM1.92 – RM2.11

Source: Mercury Securities Research - 16 Oct 2024